PAUL MICHELMAN: Hello, and welcome to the HBR IdeaCast from Harvard Business Online. In this week’s program, Julie Devoll, from the Harvard Business School Press, sits down with John Boudreau, author of Beyond HR: The New Science of Human Capital. And in our HBR In Brief segment, reclaim your job.

JULIE DEVOLL: This is Julie Devoll from Harvard Business School Press. I’m here today with John Boudreau, research director at the Center for Effective Organizations, and Professor of Management and Organization in the Marshall School of Business at the University of Southern California. John is coauthor of the new book, Beyond HR: The New Science of Human Capital. John, thank you for joining us today.

JOHN BOUDREAU: Thanks for the opportunity, Julie.

JULIE DEVOLL: So, your book talks about perhaps the most crucial resource in today’s companies, and that is their people. Whether it’s called labor, human capital, talent or some other term, the resource that lies within employees, and how they’re organized is increasingly recognized as critical to strategic success and competitive advantage.

But while executives know that their talent is important, they’ve yet to build a strategy around their talent that would give them a unique, competitive advantage. One of the problems that you state in the book, is that companies traditionally use, what you call, a peanut butter approach in terms of their human resource strategies. Can you talk about what this means, and why it’s not working?

JOHN BOUDREAU: You bet. The peanut butter approach metaphor actually came from some of the leaders in companies that we were working with. And what it means, is that very well meaning organizations have adopted principles like, to be fair, we need to be equal.

And so they approach their talent with the idea that if some people have certain incentives, others should have the same incentives. If we’re going to get people engaged, we should get everybody engaged. And we call that the peanut butter approach, because it’s like applying a very good thing equally across the population.

What struck Pete Ramstad and me in our book was, we don’t behave that way with customers, for example. Every customer isn’t the subject of maximum advertising. Every machine isn’t run at maximum capacity, So, there’s a different answer in other disciplines, rather than just doing the same thing for everyone or maximizing everything.

JULIE DEVOLL: And one of the things you also say, is that the future of talent management will go beyond today’s HR programs: programs like benefits and payroll, and training practices, and even beyond segmenting talent according to performance or personality. And that seems pretty controversial in terms of how we generally think about HR. Can you talk a little bit about what’s driving this change in human resource practices?

JOHN BOUDREAU: Well, first of all, let me say that the attention to great HR practices is a good thing. The metaphor we like to use is that just because we have a discipline of finance, and we start to differentiate where we make investments, doesn’t mean that fundamental practices like accounting go away. Just because we have a discipline like marketing that helps us differentiate customer segments, doesn’t mean that important practices like sales and advertising go away.

So, the first thing is to say, that those programs and practices in HR are going to remain fundamentally important. But what’s going to happen is, they’re going to be embedded within a decision focused approach, as we call it. And the idea is, that not only will we understand differences between people’s performance, or whether certain individuals have different personalities, or whether some people are high potential and others aren’t, the world in front of us suggests that we can differentiate talent pools into talent segments like customer segments.

And the fundamental question will be, where do improvements in talent performance make the biggest difference to our strategic success, just like we ask, which customer segments make the biggest difference to our strategic success.

JULIE DEVOLL: So, as part of having a strategic approach to talent management, one of the first steps you recommend that executives make decision around, is what, you say, is their pivotal talent in the organization or the pivot points. Can you talk about these pivot points within organization, and why they matter in terms of talent strategy?

JOHN BOUDREAU: You bet. The question of pivot points is something that comes up in every other discipline. So, as other disciplines like finance, marketing, operations, research, et cetera, as they mature, they start to begin to focus on optimizing not just maximizing. Like I said, we don’t run every machine at full capacity. We have a particular optimized level of capacity across an assembly line.

And the way we find out where changes in any process would make a difference, is something like a constraint, or a bottleneck, or a pivot point. So, if you have all your machines running well, but there’s one process or machine that doesn’t, fixing that machine, so that all the others can work well, is the critical thing. It’s like a bottleneck in a hose, or a bottleneck in a pipe.

So, what we suggest is that in organizations there are strategy pivot points, places where improving on your delivery of something makes the biggest difference to your success. And once you find those, there are often talent pivot points where improving the performance of talent would make a big difference to those strategy pivot points.

JULIE DEVOLL: So, what I found interesting is that you say that the pivot points in organizations are not the usual suspects. So, they may not be the leaders, or even the top earning sales people, or even technical professionals.

JOHN BOUDREAU: Well, I think that’s right. What we see a lot in organizations is a great deal of attention to the same talent pools that everybody else is working on. So, if we need more sales, it seems logical to invest in our sales people, and to train them, and select them, and reward them. Virtually every leadership group believes that they are pivotal. And so we end up working hard on improving leadership and building better leaders. There is nothing wrong with that, and those are definitely important.

But very often what we find is that in the places no one’s looking, there may be pivot points that no one has found. For example, we might say that pilots in an airline are very, very important. But the difference between average and super good pilot performance in an airline is, by design, not very much. That’s very different from the Navy, where the difference between average and super pilot performance is very, very large.

So, the pivot points require that we think about how does a given role make a difference to our strategy. And that helps us understand where improving the performance of talent would make the biggest difference, not just where talent is very, very important.

JULIE DEVOLL: One of the company example you use is Disney. And you say that their pivotal positions are actually not the ones we’d normally think of, and I know I would think of Mickey Mouse. Can you talk about Disney’s approach to managing their talent?

JOHN BOUDREAU: Well, that’s exactly right. When I do this exercise, and I’ve been doing it for about 15 years, and you think about the Disney theme park, and you think about, what is the vital, critical talent there, almost everybody answers characters first. And they are absolutely right.

Again, the idea is to differentiate what’s vital or important from what’s pivotal. Your most vital customer segment may be the people who have been purchasing your products for a long time. But your most pivotal customer segment may be consumers in China, or India, or some other place that have great opportunity and potential for sales increases, but may not be your biggest customers at all.

Well, at Disney, characters are very important. But the difference in performance between Mickey Mouse at the C level and the A level is, by design, very, very small. It’s just too important. On the other hand, there are other positions– I like to use the metaphor of sweepers. And my favorite story is a sweeper who stops sweeping, notices that your child is a little sunburned, and helps you find a shady spot up the hill where you can watch the parade.

That is a critical, strategic element that creates great surprise and delight. And that sweeper makes a much, bigger difference if they know how to do that then the character might make. Now, the characters are important, but they’re so important, that they actually don’t differ very much in performance. Whereas, sweepers are pivotal, because the difference in performance makes a big difference to customer’s surprise and delight.

JULIE DEVOLL: So, John what you’re saying is that this seems to have implications for the rest of the people in the organization, the people who aren’t necessarily the sweepers. So, how do you recommend managers deal with this? How do they tell the Mickey Mouses of the organization, that they’re just not as pivotal as the sweepers?

JOHN BOUDREAU: That’s a great question, and I like the way that you phrased it. Because, very often when I hear from organizations that are used to a policy that says, to be fair we must be equal, or a world in which they really don’t have a logic for these hard conversations, is, how can we ever do this? We just have to treat everybody the same, or we wouldn’t want to talk about Mickey Mouse and the sweeper this way.

The answer, of course, is that fairness doesn’t equal equality. But rather, Mickey Mouse is very important, but important to maintain performance at a very specific level. We can’t have Mickey Mouse innovating, because then we’d have to have too many of them in the park. Sweepers, on the other hand, have the freedom to innovate with regard to customer service because of the position that they’re in, and because of what we need from them.

So, the conversation should really be, if you are in the Mickey Mouse costume, you are unbelievably important to us. And we are going to reward you, and we are going to manage you so that you unerringly deliver a very consistent performance, very much like pilots in an aircraft. If you want to have lots of discretion, and if you want to have lots of interaction with our guests, then you should think about becoming a sweeper.

And I know it seems counterintuitive to say that, but it’s not that Mickey Mouse isn’t important, but it has an important role within a very specific definition. The sweeper has a different role. And once people understand that, and once we can have these conversations, I think we start to have a world in which it’s much more like customers.

For example, with me, when I buy certain products from certain people, I’m not a frequent buyer, and so I get a certain level of service– or when I fly a certain airline. On other airlines, or with other products I get a very, high level of service. We all understand that.

It may not feel great when we we’re purchasing the product we don’t purchase that often, and we don’t quite get the service level that we get elsewhere, but we understand that businesses have to optimize their customer resource, and that we’re part of that.

I think we can reach a place where employees start to understand that too. And we give leaders the power to have logical, principled conversations so that everyone understands that fairness and equality don’t have to be this–

JULIE DEVOLL: So, in turning it around a little bit, let’s talk about what this means for the individual worker. What are some tactics that you think that individual workers can do to improve their own visibility within a company and become that pivotal person? And how do they start to have those conversations with their managers?

JOHN BOUDREAU: Well, that’s a great question. Right now, a lot of the recognition of the importance of these ideas is happening among business leaders and among HR leaders. And one of the tasks we have is to help business leaders think more clearly about their strategies, and how talent is pivotal to those strategies– to identify the difference between a character and a sweeper, or a pilot and a gate agent, and understand that importance versus pivotalness difference.

But you raise a great point, because I think in the future the big power of this idea is when the sweepers know that they’re pivotal when they serve customers, and when they help that child find a shady spot up the hill, and they understand the difference between the importance of sweeping but the pivotalness of customer service.

So, how to become pivotal? Well, I think what we need is for all employees to start asking the question, what is it that I do that makes the biggest difference to the success of this organization, and is that necessarily the thing that’s in my job description?

So, if a sweeper discovers that you’re measuring me a lot on how I sweep, but I’m finding that customers are more delighted when I can give them great information, et cetera, somehow, that information needs to get up the channels. Managers need to hear it. Leaders need to hear it.

And in the best organizations, we find that this concept of talent pivotalness, the concept of connecting talent to strategy, is not just the purview of business leaders, it’s not just the purview of HR. But the whole organization starts to have a language and a logic for seeing these differences, including employees who become immensely empowered when they’re allowed to act on their understanding of what is pivotal and what’s important.

JULIE DEVOLL: Great, John. Well, thank you for taking the time today to speak with us.

First– the idea in brief. 90% of managers waste time and fritter away their productivity by grappling with an endless list of demands from others. Why? We assume, wrongly, that those demands are requirements, and that we lack personal discretion or control over our jobs. The consequence– we remain trapped in inefficiency.

But we can escape this trap, if we learn how to grasp opportunities, trust our own judgment, and methodically fulfill personal goals that tally with our organization’s objectives. The key is set priorities and then stick to them, focusing on efforts that support those priorities. Overcome resource constraints by attacking goals strategically, demonstrating success at every step. And develop a range of alternatives to exploit when plan A fails.

We all want to make a difference in our organizations, as well as build satisfying careers. By understanding how we inhibit ourselves and taking purposeful, strategic action, we can seize control of our jobs rather than letting our jobs control us. The payoff– impressive results for our companies and rewarding work lives for us.

Next– the idea in practice. To reclaim your job and better support your company’s priorities, apply three strategies. One, prioritize demands. To achieve personal and organizational goals quickly, slow down and focus your time and attention.

Here’s an example. McKinsey associate principal, Jessica Spungin, took on too many projects that had little connection to her skills and interests. Result– her project teams rated her second from the bottom among her peers.

Realizing her desire to be indispensable sprang from lack of confidence, Spungin took steps to manage demands. She clarified her goal to become a partner. Then she set long term priority supporting that goal.

She began managing her own development, for example, choosing assignments that most interested her. And she started orchestrating her time, meeting only with people who really needed her working on long term projects during months when she traveled less. Her reward, she scored second from the top in her peer group, and was named a McKinsey partner.

Two– liberate resources. To relax resource constraints and win the backing you want, attack your goal strategically. Be patient, the process can take years. Here’s an example. As the new head of HR development at airline Lufthansa, Thomas Sattelberger dreamed of launching Germany’s first corporate business school.

Knowing he needed several years to establish his credibility, he first overhauled inefficient HR processes. He then developed initiatives supporting the school. Raising money for these projects by presenting compelling facts and arguments to his counterparts and the CEO.

After four years of methodical work on Sattelberger’s part, Lufthansa’s CEO and board understood how its programs fit together. When he wrote a memo to directors requesting creation of the school before Daimler-Benz could be beat Lufthansa to the punch, the board promptly approved the request.

Number three– exploit alternatives. Use your expertise to anticipate and circumvent possible obstacles to your goals. You’ll expand the scope of opportunity for your company and yourself. Here’s an example. Dan Andersson, a manager at oil refiner Conoco Phillips, was part of a team exploring Conoco’s entrance into the Finnish market.

Conoco decided to store petrol in tanks in Finland that Shell had abandoned, but Anderson developed contingency plans. Plan B, for instance, involved building a new facility. His efforts paid off. When research revealed the abandoned tanks were unsuitable for petrol storage, Anderson activated plan B.

Though the new facility target site was contaminated, Anderson discovered that Shell was responsible for cleaning the site. Once cleanup ended, Conoco built the tanks. Conoco became the most efficient operator of automated self-service filling stations in Finland. Anderson now heads Conoco’s retail development in Europe.

We hope you’ve enjoyed this week’s program. To learn more on these and many other management topics, please visit our website at, www.harvardbusinessonline.org. Thanks for listening, and we hope you’ll join us again next week.